Pound to US Dollar rate drops as cross-party talks fail to reach a Brexit agreement

Pound to US Dollar rate drops as cross-party talks fail to reach a Brexit agreement

The Pound is trading around 3 month lows at the moment against the US Dollar as well as other currencies such as the Euro.

Failure of Brexit talks hits the pound to us dollar rate

The positive sentiment surrounding the Pound earlier this month has waned and the gains have been reversed with the Pound falling by almost 3% since the highs. The gains were based on the hopes of cross-party talks being productive as UK Prime Minister May and Labour leader Jeremy Corbyn were in talks to try and find an agreement regarding May’s Brexit plan.

There has been rumours that the talks had hit a stumbling block but it’s now been confirmed that the talks have ended without a deal in place according to reports from the BBC earlier this morning. There will now be a second phase of talks which will be centred around agreeing a process of Parliamentary votes designed to help find a consensus for the Brexit plan.

When will Theresa May resign?

There has also been pressure on UK Prime Minister May to announce her resignation date, as it’s clear that a number of Conservative Party members aren’t happy with her leadership. Yesterday afternoon she announced that she will announce her departure date after the next vote on the Brexit deal which will take place next month.

What could affect the GBP/USD exchange rate today?

From the US side the main driver of US Dollar value continues to be the US-China trade war, which has resulted in the largest S&P 500 sell-off of the year which took place last week.

From an economic standpoint there will be the Consumer Sentiment Index released at 3pm this afternoon which could move the markets, so it’s worth being aware of.

There are no data releases out of the UK this afternoon, so political updates are likely to remain the key market mover moving into the weekend.

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